What changed in this filing

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Item 1. Financial Statements

2024-09-06 compared with 2024-06-06 · 169 added, 86 removed, 399 unchanged (39% of the section changed)

5 unchanged sentences

Three Months Ended

Six Months Ended

Cost of goods sold

Operating expenses

Operating profit

Operating profit (loss)

Other income (expense), net

Interest expense

Income before taxes

Income tax expense

Net income per common share:

Income (loss) before taxes

Income tax expense (benefit)

Net income (loss)

Net income (loss) per common share:

Weighted average common shares outstanding:

4 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

Other comprehensive income (loss):

Foreign currency translation adjustments

Comprehensive income

Comprehensive income (loss)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5 unchanged sentences

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 927 and $ 857 at April 30, 2024 and January 31, 2024, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 1,033 and $ 857 at July 31, 2024 and January 31, 2024, respectively

Prepaid VAT and other taxes

27 unchanged sentences

authorized 20,000,000 shares Issued 8,754,812 and 8,722,965 ;

outstanding 7,377,815 and 7,364,757 at April 30, 2024 and January 31, 2024, respectively

outstanding 7,396,604 and 7,364,757 at July 31, 2024 and January 31, 2024, respectively

Treasury stock, at cost;

1,358,208 shares at April 30, 2024 and January 31, 2024, respectively

1,358,208 shares at July 31, 2024 and January 31, 2024, respectively

Additional paid-in capital

18 unchanged sentences

Treasury stock purchased

Balance, July 31, 2023

( 1,358,208 )

Balance, April 30, 2023

( 1,353,508 )

Other comprehensive loss

Stock-based compensation:

Restricted stock issued

Restricted stock plan

Return of shares in lieu of payroll withholding

Treasury stock purchased

Balance, July 31, 2023

( 1,358,208 )

Balance, January 31, 2024

( 1,358,208 )

Other comprehensive loss

Other comprehensive income

Stock-based compensation:

3 unchanged sentences

Treasury stock purchased

Balance, July 31, 2024

( 1,358,208 )

Balance, April 30, 2024

( 1,358,208 )

Other comprehensive income

Stock-based compensation:

Restricted stock issued

Restricted stock plan

Return of shares in lieu of payroll withholding

Treasury stock purchased

Balance, July 31, 2024

( 1,358,208 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Cash flows from operating activities:

21 unchanged sentences

Credit facility borrowings

Term loan borrowings

Payments on debt facilities

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AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Lakeland Industries, Inc.

4 unchanged sentences

Internationally, we sell to a mixture of end users directly and to industrial distributors depending on the particular country and market.

Sales are made to more than 50 countries, the majority of which were into China, countries within the European Economic Community (“EEC”), Canada, Chile, Argentina, Russia, Kazakhstan, Colombia, Mexico, Ecuador, India, Middle East and countries within Southeast Asia.

Basis of Presentation

7 unchanged sentences

thus, for example, FY25 refers to the fiscal year ending January 31, 2025, (b) “Q” refers to quarter;

thus, for example, Q1 FY25 refers to the first quarter of the fiscal year ending January 31, 2025, (c) “Balance Sheet” refers to the unaudited condensed consolidated balance sheet, and (d) “Statement of Operations” refers to the unaudited condensed consolidated statement of operations.

thus, for example, Q2 FY25 refers to the second quarter of the fiscal year ending January 31, 2025, (c) “Balance Sheet” refers to the unaudited condensed consolidated balance sheet, and (d) “Statement of Operations” refers to the unaudited condensed consolidated statement of operations.

Recent Accounting Pronouncements

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Early adoption is permitted and this guidance should be applied prospectively but there is the option to apply it retrospectively.

The Company plans to adopt the provisions of this guidance in conjunction with our Form 10-K for our fiscal year ending January 31, 2026.

The Company is currently evaluating the impact of this guidance in conjunction with our Form 10-K for our fiscal year ending January 31, 2026.

Segment Reporting

4 unchanged sentences

Early adoption is permitted and the guidance should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable.

The Company plans to adopt the provisions of this guidance in conjunction with our Form 10-K for the fiscal year ending January 31, 2025.

The Company is currently evaluating the impact of this guidance in conjunction with our Form 10-K for the fiscal year ending January 31, 2025.

Investments and Acquisitions

Bodytrak Investment

On October 18, 2021, the Company entered into an Investment Agreement (the “Investment Agreement”) with Inova Design Solutions Ltd, a private limited company incorporated under the laws of England and Wales and headquartered in the United Kingdom, doing business as Bodytrak ® (“Bodytrak”), and the other parties thereto, pursuant to which Bodytrak agreed to issue and sell to the Company 508,905 cumulative convertible series A shares of Bodytrak (“Series A Shares”) in exchange for a payment by the Company of £2,000,000 ($ 2.8 million).

16 unchanged sentences

Bodytrak’s solution is provided as a platform as a service (PaaS), delivering real-time data, cloud-based analytics, and hardware that includes a patented earpiece for physiological monitoring and audio communications.

The Company recognized losses of $ 0.1 million for each of the three months ended April 30, 2024 and 2023, as the Company’s share of Bodytrak’s net loss.

The Company recognized losses of $ 0.1 million for the three months ended July 31, 2024 and 2023, respectively, and recognized losses of $ 0.2 million and $ 0.3 million for the six months ended July 31, 2024 and 2023, respectively, as the Company’s share of Bodytrak’s net loss.

The loss is reflected in other income (expense), net in the consolidated statements of operations.

Acquisition of LHD

On July 1, 2024, the Company acquired the fire and rescue business of LHD Group Deutschland GmbH and its subsidiaries in Hong Kong and Australia (collectively, "LHD") in an all-cash transaction subject to post-closing adjustments and customary holdback provisions.

Total consideration was $ 15.9 million, net of $ 1.5 million cash acquired, of which $ 15.5 million was paid to retire LHD’s debt, $ 0.8 million was paid to the seller at closing, and $ 1.1 million remained unpaid subject to post-closing adjustments and customary holdback provisions.

LHD is a leading provider of firefighter turnout gear, accessories, and personal protective equipment cleaning, repair, and maintenance.

LHD has 111 employees worldwide and is headquartered in Wesseling, Germany, with operations in Hong Kong and Australia.

LHD’s operating results are included in our consolidated financial statements from the acquisition date.

The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting.

LHD’s operating results and assets including acquired intangibles and goodwill will be reported as part of Europe in our geographic segment reporting.

The following table summarizes the preliminary fair values of the LHD assets acquired and liabilities assumed at the date of the acquisition:

Net working capital acquired

Property, plant and equipment

Customer relationships

Trade names and trademarks

Technological know-how

Other liabilities assumed

Total net assets acquired

Assets acquired and liabilities assumed in connection with the acquisition were recorded at estimated fair values.

Estimated fair values were determined by management, based in part on an independent valuation performed by a third-party valuation specialist.

The valuation methods used to determine the estimated fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges;

the relief from royalty method for trade names and trademarks and technological know-how;

and the cost method for the assembled workforce was included in goodwill.

Several significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital changes.

Cash flow forecasts were generally based on LHD’s pre-acquisition forecasts.

Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives.

The customer relationships, trade names and trademarks and technological know-how acquired in the LHD transaction are being amortized over periods of 20 years, 10 years and 15 years, respectively .

Goodwill is calculated as the excess of the purchase price over the estimated fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Among the factors that contributed to a purchase price in excess of the estimated fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of LHD with our operations.

Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals, inventory, contractual relationships, tangible assets and intangible assets.

These changes to the purchase price allocation could be significant.

The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition date.

Acquisition of Jolly

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Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals, contractual relationships, tangible assets and intangible assets.

These changes to the purchase price allocation could be significant.

9 unchanged sentences

The amount of the reduction to the holdback to be paid by Pacific is $0.3 million .

Due to the timing of the completion of the acquisition, the purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding assets acquired and liabilities assumed, and revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals, contractual relationships, tangible assets and intangible assets.

These changes to the purchase price allocation could be significant.

The purchase price allocation will be finalized within the measurement period of up to one year from the acquisition date.

The following unaudited pro forma information presents our combined results as if the Jolly and Pacific acquisitions had occurred at the beginning of FY24.

The following unaudited pro forma information presents our combined results as if the LHD, Jolly and Pacific acquisitions had occurred at the beginning of FY24.

The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition;

1 unchanged sentence

and (3) expected to have a continuing impact on the combined company's results.

There were no material transactions between the Company, Jolly and Pacific during the periods presented that are required to be eliminated.

There were no material transactions between the Company, LHD, Jolly and Pacific during the periods presented that are required to be eliminated.

The unaudited pro forma combined financial information does not reflect cost savings, operating synergies or revenue enhancements that the combined companies may achieve or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies or revenue enhancements.

Pro forma combined financial information (Unaudited)

(in millions, except per share amount)

Quarter Ended April 30,

(in millions, except per share amounts)

Three Months Ended

Six Months Ended

Net income (loss)

Basic earnings per share

4 unchanged sentences

The Company has been treated as the acquirer.

Acquisition of Eagle

On December 2, 2022, the Company acquired 100% of Eagle Technical Products Limited’s (Eagle) common stock in an all-cash transaction valued at $ 10.5 million, net of net working capital acquired.

Headquartered in Manchester, UK, Eagle is a leading designer and provider of protective apparel to the fire and industrial sectors.

Eagle provides differentiated product offerings through its innovative and technical solutions.

Eagle’s operating results are included in our consolidated financial statements from the acquisition date.

The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting.

As part of the Eagle acquisition agreement, the Company agreed to pay an earnout payment equal to the amount by which Eagle’s revenue exceeded 6 million GBP for the period May 1, 2022 through April 30, 2023.

The Company will also pay an earnout payment equal to the amount by which Eagle’s revenue exceeded 6.3 million GBP for the period May 1, 2023 through April 30, 2024.

Eagle did not reach the revenue threshold for the period May 1, 2022 through April 30, 2023 and received no payment for that period.

At January 31, 2024, the Company had recorded $0.6 million for the earnout payment for the period May 1, 2023 through April 30, 2024, using a Monte Carlo simulation.

Based on Eagle’s revenue for the period May 1, 2023 through April 30, 2024, the earnout payment was $0.2 million.

The adjustment to the accrued earnout payment of $0.4 million was recorded in the quarter ended April 30, 2024 and reflected as a reduction in operating expenses .

Inventories consist of the following (in $000s):

4 unchanged sentences

Goodwill and Intangible Assets, Net

Changes in goodwill during the quarters ended April 30, 2024 and 2023, were as follows (in $000s):

Changes in goodwill during the three and six months ended July 31, 2024 and 2023, were as follows (in $000s):

Balance at January 31

1 unchanged sentence

Balance at April 30

Changes in intangible assets during the quarters ended April 30, 2024 and 2023, were as follows (in $000s):

Measurement period adjustment

Balance at July 31

Changes in intangible assets, net, during the three and six months ended July 31, 2024 and 2023, were as follows (in $000s):

Balance at January 31

Balance at April 30

Measurement period adjustments

Balance at July 31

Contract Advances

2 unchanged sentences

These advances are included in Other Accrued Expenses on the Company’s consolidated balance sheet.

The following is a roll-forward of the advances from January 31, 2024 through April 30, 2024 and from January 31, 2023 through April 30, 2023 (in $000s):

The following is a roll-forward of the advances from January 31, 2024 through July 31, 2024 and from January 31, 2023 through July 31, 2023 (in $000s):

Contract liability – January 31

1 unchanged sentence

Decreases to contract liability

Contract liability – April 30

Contract liability – July 31

Long-Term Debt

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The Fourth Amendment provides for additional indebtedness or the assumption of existing indebtedness for acquisitions of foreign subsidiaries (not to exceed $10.0 million in USD) and increased the size of Permitted Acquisitions, without prior approval from the Lender, to $17.5 million per occurrence and $35.0 million in the aggregate .

We were in compliance with all financial covenants of the Loan Agreement as of April 30, 2024.

As of April 30, 2024, the Company had no borrowings outstanding on the letter of credit sub-facility and borrowings of $ 12.3 million outstanding under the revolving credit facility.

We were in compliance with all financial covenants of the Loan Agreement as of July 31, 2024.

As of July 31, 2024, the Company had no borrowings outstanding on the letter of credit sub-facility and borrowings of $ 25.3 million outstanding under the revolving credit facility.

Borrowings in UK

There were no borrowings outstanding under the Company’s credit facility with HSBC Bank at April 30, 2024 and January 31, 2024.

There were no borrowings outstanding under the Company’s credit facility with HSBC Bank at July 31, 2024 and January 31, 2024.

Pacific Borrowings

7 unchanged sentences

Borrowings under the trade finance facility and amounts due in FY25 under the term loans are reported as short-term borrowings.

There were no borrowings under this facility at April 30, 2024 and $ 0.3 million at January 31, 2024.

Borrowings under the term loans due after FY25 are reported as long-term borrowings and were $ 0.7 million and $ 0.7 million at April 30, 3024 and January 31, 2024, respectively.

There were no borrowings under this facility at July 31, 2024 and $ 0.3 million at January 31, 2024.

Borrowings under the term loans due after FY25 are reported as long-term borrowings and were $ 0.6 million and $ 0.7 million at July 31, 3024 and January 31, 2024, respectively.

Jolly Borrowings

On May 9, 2024, Jolly entered into a term loan agreement for 1,500,000 Euros to support working capital requirements with Banca Intesa Spa.

The term loan will expire on March 31, 2027 and carries an interest rate of 5.42%.

The term loan will be repaid in 11 installments of 136,364 Euros paid quarterly beginning September 30, 2024.

Interest payments will be made quarterly and began June 30, 2024.

The loan is guaranteed by SACE S.p.A., the Italian state-owned export credit finance agency.

Jolly received an advance of 1,200,000 Euros from BNL Bank as an advance on an Italian firefighters contract that will conclude in FY26.

Interest on the advance is Euribor plus 1.0%.

Borrowings under the term loans due after FY25 are reported as long-term borrowings and were $ 2.9 million at July 31, 2024.

LHD Borrowings

Prior to the Company’s acquisition, LHD secured a federally guaranteed term loan of 800,000 Euros from Commerzbank AG under the “KfW Quick Loan 2020” program, launched by the German government in 2020 to support small and medium-sized enterprises affected by the COVID-19 crisis .

The loan, which matures on June 30, 2030 , began loan repayments on September 30, 2022, with quarterly installments of 25,000 Euros .

As of July 31, 2024, the outstanding balance was 600,000 Euros ($ 650,000 ).

The loan carries an interest rate of 3 % per annum, with interest payments being due in arrears at the end of each quarter.

Concentration of Risk

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Banco Mercantil Del Norte SA in Mexico;

ZAO KB Citibank Moscow in Russia, JSC Bank Centercredit in Kazakhstan, BNL Banca Nazionale del Lavoro, Monte Dei Paschi di Siena and Banca delle Terre Venete in Italy and Bank of New Zealand in New Zealand.

ZAO KB Citibank Moscow in Russia;

JSC Bank Centercredit in Kazakhstan;

BNL Banca Nazionale del Lavoro, Monte Dei Paschi di Siena and Banca delle Terre Venete in Italy;

Commerzbank in Germany;

and Bank of New Zealand in New Zealand.

The Company monitors its financial depositories by their credit rating, which varies by country.

1 unchanged sentence

There was approximately $ 0.5 million total included in U.S.

bank accounts and approximately $ 25.8 million total in foreign bank accounts as of April 30, 2024, of which $ 27.6 million was uninsured.

bank accounts and approximately $ 24.3 million total in foreign bank accounts as of July 31, 2024, of which $ 24.1 million was uninsured.

Major Customer

No customer accounted for more than 10 % of net sales during the three-month periods ended April 30, 2024 and 2023.

No customer accounted for more than 10 % of net sales during the three and six-month periods ended July 31, 2024 and 2023.

Major Supplier

No vendor accounted for more than 10 % of purchases during the three-month periods ended April 30, 2024 and 2023.

No vendor accounted for more than 10 % of purchases during the three and six-month periods ended July 31, 2024 and 2023.

Stockholders’ Equity

5 unchanged sentences

On June 16, 2021, the stockholders of the Company approved Amendment No.

1 (the “Amendment”) to the 2017 Plan.

The Amendment increases the number of shares of common stock, par value $ 0.01 per share, of the Company reserved for issuance under the 2017 Plan by 480,000 shares.

1 ( “Amendment No.

1”) to the 2017 Plan.

Amendment No.

1 increased the number of shares of common stock, par value $ 0.01 per share, of the Company reserved for issuance under the 2017 Plan from 360,000 to 840,000 shares.

On June 13, 2024, the stockholders of the Company approved Amendment No.

2 (“Amendment No.

2”) to the 2017 Plan.

Amendment No.

2 increased the number of shares of common stock, par value $ 0.01 per share, of the Company reserved for issuance under the 2017 Plan from 840,000 to 1,240,000 shares.

An aggregate of 1,240,000 shares of the Company’s common stock are authorized for issuance under the 2017 Plan, as amended, subject to adjustment as provided in the 2017 Plan for stock splits, dividends, distributions, recapitalizations and other similar transactions or events.

If any shares subject to an award are forfeited, expire, lapse or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, lapse or termination, again be available for issuance under the 2017 Plan.

On June 13, 2024, the stockholders of the Company will vote on a proposed Amendment No.

2 to the 2017 Plan, which would increase the number of shares of common stock, par value $ 0.01 per share, of the Company reserved for issuance under the 2017 Plan by 400,000 shares.

The Company recognized total stock-based compensation costs, which are reflected in operating expenses (in $000’s):

Three Months Ended April 30,

Three Months Ended

Six Months Ended

Total restricted stock and stock option programs

1 unchanged sentence

Restricted Stock and Restricted Stock Units

Under the 2017 Plan, as described above, the Company awarded performance-based and service-based shares of restricted stock and restricted stock units to eligible employees and directors.

The following table summarizes the activity under the 2017 Plan for the three months ended April 30, 2024 and 2023.

This table reflects the amount of awards granted and the number of shares that would be vested if the Company were to achieve the maximum performance level under the June 2021, June 2022, March 2023 and April 2024 grants.

Under the 2017 Plan, as described above, the Company has awarded performance-based and service-based shares of restricted stock and restricted stock units to eligible employees and directors.

The following table summarizes the activity under the 2017 Plan for the six months ended July 31, 2024 and 2023.

This table reflects the amount of awards granted and the number of shares that would be vested if the Company were to achieve the maximum performance level under the June 2022, March 2023 and April 2024 grants.

Service-Based

1 unchanged sentence

Outstanding at January 31, 2024

Outstanding at April 30, 2024

Outstanding at July 31, 2024

Service-Based

1 unchanged sentence

Outstanding at January 31, 2023

Outstanding at April 30, 2023

Outstanding at July 31, 2023

The actual number of shares of common stock of the Company, if any, to be earned by the award recipients is determined over a three year performance measurement period based on measures that include revenue growth and Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) margin for the April 2022 grants.

4 unchanged sentences

The compensation cost is based on the fair value at the grant date, is recognized over the requisite performance/service period using the straight-line method, and is periodically adjusted for the probable number of shares to be awarded.

As of April 30, 2024, unrecognized stock-based compensation expense totaled $ 1.7 million pursuant to the 2017 Plan based on outstanding awards under the 2017 Plan.

As of July 31, 2024, unrecognized stock-based compensation expense totaled $ 3.0 million pursuant to the 2017 Plan based on outstanding awards under the 2017 Plan.

This expense is expected to be recognized over approximately two years.

4 unchanged sentences

On December 1, 2022, the Board of Directors authorized an increase in the Company’s stock repurchase program, under which the Company may repurchase up to an additional $ 5 million of its outstanding common stock.

No shares were repurchased during the three months ended April 30, 2024, leaving $ 5.0 million remaining under the share repurchase program at April 30, 2024.

No shares were repurchased during the six months ended July 31, 2024, leaving $ 5.0 million remaining under the share repurchase program at July 31, 2024.

The share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.

The Company’s provision for income taxes for the three months ended April 30, 2024, and 2023 is based on the estimated annual effective tax rate, in addition to discrete items.

The Company’s effective tax rate for the first quarter of FY25 was 19.0%, which differs from the U.S.

federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and Global Intangible Low-Taxed Income (“GILTI”) and impacts from the final earn-out adjustments related to the Pacific and Eagle acquisitions.

The Company's effective tax rate for the first quarter of FY24 was 29.1% which differs from the U.S.

The Company’s provision for income taxes for the three months ended July 31, 2024, and 2023 is based on the estimated annual effective tax rate, in addition to discrete items.

The Company’s effective tax rate for the second quarter of FY25 was 23.4%, which differs from the U.S.

federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and Global Intangible Low-Taxed Income (“GILTI”), and the impacts from stock compensation vestings during the quarter, partially offset by foreign withholding taxes accrued during the quarter in anticipation of additional repatriations of cash from China.

The Company's effective tax rate for the second quarter of FY24 was 32.7% which differs from the U.S.

federal statutory rate of 21% primarily due to rate differentials in foreign tax jurisdictions and GILTI.

The Company's effective tax rate for the six months ended July 31, 2024 was (13.1%), which differs from the U.S.

federal statutory rate of 21%, primarily due to rate differentials in foreign tax jurisdictions and GILTI and impacts from the final earn-out adjustments related to the Pacific and Eagle acquisitions.

The Company's effective tax rate for the six months ended July 31, 2023 was 31.5%, which differs from the U.S.

federal statutory rate of 21%, primarily due to rate differentials in foreign tax jurisdictions and GILTI.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized.

The valuation allowance was $ 6.9 million and $ 6.7 million as of April 30, 2024 and January 31, 2024, respectively.

With the exception of our UK and China subsidiaries for which we accrue relevant deferred tax impacts related to non-indefinitely reinvested cash, we consider the excess of the amount for financial reporting over the tax basis (including undistributed and previously taxed earnings) of investments in our other foreign subsidiaries as of April 30, 2024 to be indefinitely reinvested in the foreign jurisdictions on the basis of our specific plan for reinvestment and estimates that future domestic cash generation will be sufficient to meet future domestic cash needs.

The valuation allowance was $ 7.6 million and $ 6.7 million as of July 31, 2024 and January 31, 2024, respectively.

With the exception of our UK and China subsidiaries for which we accrue relevant deferred tax impacts related to non-indefinitely reinvested cash, we consider the excess of the amount for financial reporting over the tax basis (including undistributed and previously taxed earnings) of investments in our other foreign subsidiaries as of July 31, 2024 to be indefinitely reinvested in the foreign jurisdictions on the basis of our specific plan for reinvestment and estimates that future domestic cash generation will be sufficient to meet future domestic cash needs.

Therefore, we have not provided for deferred taxes related to such excess or the relevant portions thereof and disclosed that the determination of any deferred taxes related to this excess is not practicable in those permanently reinvested jurisdictions.

We have made no changes to our policy on indefinite reinvestment during the quarter ended April 30, 2024.

We have made no changes to our policy on indefinite reinvestment during the six months ended July 31, 2024.

Net Income Per Share

1 unchanged sentence

Three Months Ended

Denominator for basic net income per share (weighted-average shares which exclude shares in the treasury, 1,358,208 and 1,353,508 at April 30, 2024 and 2023, respectively

Six Months Ended

Net income (loss)

Denominator for basic net income (loss) per share (weighted-average shares which exclude shares in the treasury, 1,358,208 at July 31, 2024 and 2023)

Effect of dilutive securities from restricted stock plan

Denominator for diluted net income per share (adjusted weighted average shares)

Basic net income per share

Diluted net income per share

Denominator for diluted net income (loss) per share (adjusted weighted average shares)

Basic net income (loss) per share

Diluted net income (loss) per share

Contingencies

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however, there can be no assurance as to the ultimate outcome of these matters.

As of April 30, 2024, to the best of the Company’s knowledge, there were no significant outstanding claims or litigation.

As of July 31, 2024, to the best of the Company’s knowledge, there were no significant outstanding claims or litigation.

Segment Reporting

1 unchanged sentence

Our US operations include a facility in Alabama (primarily the distribution to customers of the bulk of our products and the light manufacturing of our chemical, wovens, reflective, and fire products).

The Company also maintains one manufacturing company in China (primarily disposable and chemical suit production), a manufacturing facility in Mexico (primarily disposable, reflective, fire and chemical suit production), a manufacturing facility in Vietnam (primarily disposable production), a manufacturing facility in New Zealand (helmets) and a small manufacturing facility in India.

The Company also maintains one manufacturing company in China (primarily disposable and chemical suit production), a manufacturing facility in Mexico (primarily disposable, reflective, fire and chemical suit production), a manufacturing facility in Vietnam (primarily disposable production), a manufacturing facility in Argentina (primarily wovens), a manufacturing facility in New Zealand (helmets), a manufacturing facility in Romania (boots) and a small manufacturing facility in India.

Our China facilities produce the majority of the Company’s products, and China generates a significant portion of the Company’s international revenues.

1 unchanged sentence

We have sales forces in the USA, Canada, Mexico, Europe, Latin America, India, Russia, Kazakhstan, Australia, New Zealand and China, which sell and distribute products shipped from the United States, Mexico, India or China.

The table below represents information about reported segments for the three-month periods noted therein:

The table below represents information about reported segments for the three and six month periods noted therein:

Three Months Ended

Six Months Ended

(in millions of dollars)

USA Operations (including Corporate)

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Three Months Ended

Six Months Ended

(in millions of dollars)

Operating Profit (Loss):

3 unchanged sentences

Intersegment profit (loss)

Consolidated operating profit

April 30, 2024

Consolidated operating profit (loss)

July 31, 2024

January 31, 2024

(in millions of dollars)

Total Assets:

Total Assets Less Intersegment:

USA Operations (including Corporate)

5 unchanged sentences

(in millions of dollars)

Six Months Ended

(in millions of dollars)

External Sales by product lines:

3 unchanged sentences

Subsequent Events

Acquisition of LHD Group

On April 2, 2024, Lakeland Global Safety, Ltd.

(“Lakeland Global”), a wholly-owned subsidiary the Company, entered into a Share Sale and Purchase Agreement (the “Purchase Agreement”), by and between Kantaras Investments Pte.

Ltd., Lakeland Global, and the Company, pursuant to which Lakeland Global will acquire all of the shares of the fire and rescue business of LHD Group Deutschland GmbH, LHD Group Australia Pty Ltd and LHD Group Hong Kong Ltd., wholly-owned entities of Kantaras Investments Pte.

(collectively, the “LHD Group”) for a purchase price of EUR 15.4 million (approximately USD $ 16.7 million), subject to post-closing adjustments and customary holdback provisions.

The LHD Group is a leader in firefighter turnout gear, accessories, and Total Care services, including laundry, repair, and maintenance.

The transaction will be funded through the Company’s credit facility and is expected to close in June 2024.

Second Quarter Dividend

On May 1, 2024, the Company’s Board of Directors declared a quarterly cash dividend.

The quarterly dividend of $ 0.03 per share or approximately $ 0.2 million, was paid on May 22, 2024, to stockholders of record as of May 15, 2024.

Third Quarter Dividend

On August 1, 2024, the Company’s Board of Directors declared a quarterly cash dividend.

The quarterly dividend of $ 0.03 per share or approximately $ 0.2 million, was paid on August 22, 2024, to stockholders of record as of August 15, 2024.

Additional Investment in Bodytrak

On August 28, 2024, the Company made an additional investment in Bodytrak in the form of a secured convertible loan of £200,000 ($ 0.3 million on the date of investment).

The loaned amounts are due twenty-four months from the issue date, which can be extended upon mutual agreement.

The convertible note bears interest at either an annual rate of 12% for cash interest or 15% for payment in kind interest on the outstanding amount under the note, such rate being selected by Bodytrak.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements